SUSHMA SHIVKUMAR DAGA & ANR.versusMADHURKUMAR RAMKRISHNAJI BAJAJ & ORS

                  [2023] 15 S.C.R. 909 : 2023 INSC 1081



                              CASE DETAILS

                SUSHMA SHIVKUMAR DAGA & ANR.
                                        v.
        MADHURKUMAR RAMKRISHNAJI BAJAJ & ORS
                       (Civil Appeal No. 1854 of 2023)
                            DECEMBER 15, 2023
     [ANIRUDDHA BOSE AND SUDHANSHU DHULIA, JJ.]
                                HEADNOTES
      Issue for consideration: The trial Court referred the matter to
arbitration and the said decision was upheld by the High Court. Whether
the Trial Court and the High Court have rightly referred the matter to
arbitration or the dispute is of such a nature that it is not liable to be referred
to arbitration, as there was no arbitration clause in the Conveyance Deed
dated 17.12.2019 or if there was, yet the matter in any case is such that it
is not arbitrable.
     Arbitration and Conciliation Act, 1996 – A civil suit was filed by the
appellants-plaintiffs herein seeking declaration that the conveyance deed
dated 17.12.2019 was validly terminated and various other registered
development agreements dated 17.09.2007, 20.11.2007, 30.11.2007,
03.12.2007 and 27.02.2008 were null and void – Respondent-defendants
filed application u/s.8 of the Arbitration and Conciliation Act, 1996 –
Matter was referred to arbitration – Propriety:
      Held: In the instant case, there are broadly three objections of the
appellants: The first objection was regarding the absence of arbitration clause
in the conveyance deed and the various development agreements – The
Conveyance deed dated 17.12.2019 and the five development agreements
dated 17.09.2007, 20.11.2007, 30.11.2007, 03.12.2007 and 27.02.2008,
all find their source in the two Tripartite agreements dated 31.03.2007
and 25.07.2008 – Both the Tripartite agreements contained the arbitration
clause – The Trial Court and the High Court have rightly held that the
broad language of the ‘arbitration clause’ in the two Tripartite agreements
would cover the dispute raised by the appellants before the Civil Court
                                     909
910          SUPREME COURT REPORTS                          [2023] 15 S.C.R.


and hence rightly referred to arbitration – The second objection was that
the suit filed by the appellants is for cancellation of a document relating to
immovable property i.e. land and it therefore amounts to an action in rem
and hence arbitration is not the remedy – It is settled that whether it is a
suit for cancellation of a deed or a declaration of rights rising from deed, it
would only be an action in personam and not in rem – The third objection
was regarding fraud – The plea of fraud raised by the appellants in their
objection to the Section 8 application was never substantiated – Except for
making a bald allegation of fraud there is nothing else – This Court has
consistently held that a plea of fraud must be serious in nature in order to
oust the jurisdiction of an Arbitrator – Both the trial Court and the High
Court have given a correct finding on facts as well as law – No interference
required.[Paras 6,18,19,20]

       LIST OF CITATIONS AND OTHER REFERENCES

     Booz Allen and Hamilton Inc. v. SBI Home Finance Limited and Others,
[2011] 7 SCR 310 : (2011) 5 SCC 532; Vidya Drolia v. Durga Trading
Corpn., [2020] 11 SCR 1001 : (2021) 2 SCC 1; Uttarakhand Purv Sainik
Kalyan Nigam Ltd. v. Northern Coal Field Ltd., (2020) 2 SCC 455– relied on.
      NTPC Ltd. v. SPML Infra Ltd., (2023) 9 SCC 385; BSNL v. Nortel
Networks, [2021] 2 SCR 644 : (2021) 5 SCC 738; Smt. M. Hemalatha Devi
& Ors. v. B. Udayasri, 2023 INSC 870; Weatherford Oil Tool Middle East
Ltd. v. Baker Hughes Singapore PTE 2022 SCC OnLine SC 1464; Deccan
Paper Mills v. Regency Mahavir Properties, [2020] 13 SCR 427 : (2021)
4 SCC 786; Aliens Developers (P) Ltd. v. Janardhan Reddy, 2015 SCC
Online Hyd 370; Rashid Raza v. Sadaf Akhtar, [2019] 12 SCR 460 : (2019)
8 SCC 710 – referred to.

       OTHER CASE DETAILS INCLUDING IMPUGNED
              ORDER AND APPEARANCES

      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1854 of 2023.
     From the Judgment and Order dated 10.12.2021 of the High Court of
Judicature at Bombay in WP No.8836 of 2021.
      Appearances:
 SUSHMA SHIVKUMAR DAGA & ANR. v. MADHURKUMAR 911
           RAMKRISHNAJI BAJAJ & ORS

     Devansh Mohta, Shirish K. Deshpande, Ms. Rucha Pravin Mandlik,
Kiran Shrirang Mohite, Ms. Ishita Y. Shah, Ms. Sonakshi Monga, Mohit
Gautam, Apoorv Sharma, Advs. for the Appellants.
     Dr. A.m. Singhvi, Shyam Divan, Sr. Advs., Shriraj Dhruv, Ankur
Saigal, Ms. Swati Sutar, Ms. S. Lakshmi Iyyer, Kaushtubh Singh, Udaya
Aditiya Banerjee, Chirag Naik, Siddharth Seem, E. C. Agrawala, Tishampati
Sen, Ms. Riddhi Sancheti, Anurag Anand, Ms. Tasmiya Taleha, Advs. for
the Respondents.

       JUDGMENT / ORDER OF THE SUPREME COURT

                                 JUDGMENT
      SUDHANSHU DHULIA, J.
      1. The appellants before this Court were the plaintiffs in a civil suit,
filed in the year 2021, seeking declaration that the Conveyance Deed dated
17.12.2019 to be declared null and void, and that the registered Development
Agreements dated 17.09.2007, 20.11.2007, 30.11.2007, 03.12.2007 and
27.02.2008 stand validly terminated. The respondents/defendants moved
an application under Section 8 of the Arbitration & Conciliation Act, 1996
(hereinafter referred to as “Arbitration Act”) for referring the matter to
arbitration by relying upon the arbitral clause in the two agreements dated
31.03.2007 and 25.07.2008. It was contended that the aforesaid agreements
formed the basis of the Conveyance Deed and the Development Agreements
which are subject matter of the suit. The Trial Court allowed the application
of the defendant and referred the matter for arbitration, vide its order dated
13.10.2021. This order was challenged in Writ Petition No.8836 of 2021
by the appellants / plaintiffs before the Bombay High Court, which was
dismissed vide order dated 10.12.2021. Aggrieved by these two orders, the
appellants / plaintiffs are now before this Court.
       2. The only question to be decided by us here is whether the Trial
Court and the High Court have rightly referred the matter to arbitration or
the dispute is of such a nature that it is not liable to be referred to arbitration,
as there was no arbitration clause in the Conveyance Deed dated 17.12.2019
or if there was, yet the matter in any case is such that it is not arbitrable.
The brief facts of the case are as follows:
912          SUPREME COURT REPORTS                        [2023] 15 S.C.R.


      M/s Emerald Acres Private Limited (respondent no. 2) was
incorporated by Late Mr. Shivkumar Daga and his wife, Mrs. Sushma
Shivkumar Daga (appellant no.1) on 18.04.2006 to carry on the business
of real-estate development. Subsequently, two Tripartite Agreements
were signed between Shivkumar Daga (hereinafter referred to as ‘SD’),
Madhurkumar Ramakrishnaji Bajaj & Ors. (hereinafter referred to as
‘MB’) and M/s. Emerald Acres Private Limited (hereinafter referred to as
‘EAPL’) to develop, trade, and deal with the property and also to acquire
such further properties as may be mutually agreed between the parties.
Both the Tripartite Agreements dated 31.03.2007 and 25.07.2008 contain
the following arbitration clause:
      “It is agreed between Parties that in the event of any disputes or
      differences between the Parties hereto in relation to this Agreement
      or in relation to any matter touching or arising from this Agreement,
      the parties shall refer such disputes and differences to the arbitration
      under the provisions of the Arbitration & Conciliation Act, 1996 or
      any statutory modification thereof.”
      3. Shivkumar Daga died on 08.05.2011, bequeathing his assets through
a will dated 10.02.2011 to his wife (appellant no. 1) and his son (appellant
no. 2), in which a probate petition has already been filed and as per the
records before us the case is still pending.
      4. The appellants i.e., SD’s wife and his son then filed a suit seeking,
inter alia, a declaration that the Deed of Conveyance dated 17.12.2019 be
declared null and void, and that the Development Agreements entered into
pursuant to the two Tripartite Agreements be declared validly terminated.
     5. The Conveyance Deed dated 17.12.2019 sought to be declared
void and the five Development Agreements dated 17.09.2007, 20.11.2007,
30.11.2007, 03.12.2007 and 27.02.2008 sought to be declared as validly
terminated by the appellants, all find their source in the two Tripartite
Agreements dated 31.03.2007 and 25.07.2008.
      6. The first prerequisite for an application under Section 8, of an
arbitration agreement being there in the 2007 and 2008 Tripartite agreements
cannot be denied, as all the other Development Agreements find their source
in the aforesaid two Tripartite Agreements. The Trial Court and the High
 SUSHMA SHIVKUMAR DAGA & ANR. v. MADHURKUMAR 913
 RAMKRISHNAJI BAJAJ & ORS [SUDHANSHU DHULIA, J.]

Court have rightly held that the broad language of the “arbitration clause”
in the two Tripartite Agreements dated 31.03.2007 and 25.07.2008 would
cover the dispute raised by the appellants before the Civil Court, and hence
the case has been rightly referred for arbitration.
      7. The role of a ‘Court’ is now in any case, extremely limited in
arbitration matters. The underlying principles of arbitration as contained
in the Arbitration and Conciliation Act, 1996, was always to have as little
interference as possible by a judicial authority.
     Section 5 of the Arbitration Act reads as under:
     5. Extent of judicial intervention.— Notwithstanding anything
     contained in any other law for the time being in force, in matters
     governed by this Part, no judicial authority shall intervene except
     where so provided in this Part.
      Major amendments were made in the Arbitration Act in the year 2015,
inter alia, both in Section 8 and Section 11 of the Act, in order to further
reduce any chances of judicial interference and now the amended Section
8 of the Arbitration Act reads as under:
     8. Power to refer parties to arbitration where there is an arbitration
     agreement.— (1) A judicial authority, before which an action is
     brought in a matter which is the subject of an arbitration agreement
     shall, if a party to the arbitration agreement or any person claiming
     through or under him, so applies not later than the date of submitting
     his first statement on the substance of the dispute, then, notwithstanding
     any judgment, decree or order of the Supreme Court or any court,
     refer the parties to arbitration unless it finds that prima facie no valid
     arbitration agreement exists.
     (2) The application referred to in sub-section (1) shall not be
     entertained unless it is accompanied by the original arbitration
     agreement or a duly certified copy thereof.
     Provided that where the original arbitration agreement or a certified
     copy thereof is not available with the party applying for reference to
     arbitration under sub-section (1), and the said agreement or certified
     copy is retained by the other party to that agreement, then, the party so
914           SUPREME COURT REPORTS                          [2023] 15 S.C.R.


      applying shall file such application along with a copy of the arbitration
      agreement and a petition praying the court to call upon the other party
      to produce the original arbitration agreement or its duly certified copy
      before that court.
      (3) Notwithstanding that an application has been made under sub-
      section (1) and that the issue is pending before the judicial authority,
      an arbitration may be commenced or continued and an arbitral award
      made.
     The amendments in Section 8 and Section 11 of the Arbitration Act
were based on the following recommendations made in the 246th Report of
the Law Commission of India, 2014:
      “33. It is in this context, the Commission has recommended amendments
      to Sections 8 and 11 of the Arbitration and Conciliation Act, 1996. The
      scope of the judicial intervention is only restricted to situations where
      the court/judicial authority finds that the arbitration agreement does
      not exist or is null and void. Insofar as the nature of intervention
      is concerned, it is recommended that in the event the court/judicial
      authority is prima facie satisfied against the argument challenging the
      arbitration agreement, it shall appoint the arbitrator and/or refer the
      parties to arbitration, as the case may be. The amendment envisages
      that the judicial authority shall not refer the parties to arbitration only
      if it finds that there does not exist an arbitration agreement or that it
      is null and void. If the judicial authority is of the opinion that prima
      facie the arbitration agreement exists, then it shall refer the dispute
      to arbitration, and leave the existence of the arbitration agreement
      to be finally determined by the Arbitral Tribunal. However, if the
      judicial authority concludes that the agreement does not exist, then
      the conclusion will be final and not prima facie.”
    Note to the clause for amendment of Section 8 by the Arbitration and
Conciliation (Amendment) Bill, 2015 reads as under:
      Clause 4 of the Bill seeks to amend Section 8 of the principal Act to
      specify that the judicial authority shall refer the parties to arbitration
      unless it finds that prima facie no valid arbitration agreement exists.
      A proviso below sub-section (2) is inserted to provide that where the
 SUSHMA SHIVKUMAR DAGA & ANR. v. MADHURKUMAR 915
 RAMKRISHNAJI BAJAJ & ORS [SUDHANSHU DHULIA, J.]

     original arbitration agreement or certified copy thereof is not available
     with the party who apply under sub-section (1), and is retained by the
     other party, such party shall file a copy of the arbitration agreement
     along with application under sub-section (1) praying to the court to
     call upon the other party to produce the original arbitration agreement
     or its duly certified copy before the court.
     The basic purpose for bringing an amendment in Section 8 (as well
as Section 11 of the Arbitration Act) was to minimise the scope of judicial
authority in matters of arbitration, except on the ground where prima facie,
no valid arbitration agreement exists.
      8. In the present case, the 2007 as well as the 2008 Tripartite
Agreement, forms the basis for all subsequent agreements, conveyance,
etc. The arbitration clause is also very wide in its scope, as we have already
seen. At the sake of repetition, the 2008 Tripartite Agreement states that
“any dispute, in relation to these agreements or in relation to any matter
touching or arising from this Agreement, shall be referred to arbitration.”
The contention of the appellants therefore that the dispute raised in the civil
suit is non- arbitrable is also not correct. The dispute relates to a property
which is the subject matter of the two tripartite agreements dated 31.03.2007
and 25.07.2008.
      9. In the Tripartite Agreement dated 31.03.2007 the intention of the
parties was clearly to acquire and develop properties, which was indeed
done through the development agreements (sought to be declared as validly
terminated by the appellants). Clause 11 of the Tripartite Agreement dated
31.03.2007 reads as under:
      “SD and MB have in due course agreed to develop, further trade and
     deal with the Property and also to acquire such further properties as
     may be mutually agreed between the Parties and any such further
     acquisitions that may be made through a Special Purpose Vehicle viz.
     the Company wherein MB and SD shall have equity in the proportion
     of 90:10.”
     10. It is true that in Booz Allen and Hamilton Inc. v. SBI Home
Finance Limited and Others, (2011) 5 SCC 532 this Court had set apart
cases where the dispute was totally non-arbitrable, such as matrimonial
916          SUPREME COURT REPORTS                        [2023] 15 S.C.R.


disputes, guardianship dispute, or even we may add disputes relating to
consumers, which are governed by an entirely different Parliamentary
legislation known as Consumer Protection Act, 2019:
      “35. The Arbitral Tribunals are private fora chosen voluntarily by the
      parties to the dispute, to adjudicate their disputes in place of courts
      and tribunals which are public fora constituted under the laws of
      the country. Every civil or commercial dispute, either contractual
      or non-contractual, which can be decided by a court, is in principle
      capable of being adjudicated and resolved by arbitration
       unless the jurisdiction of the Arbitral Tribunals is excluded either
      expressly or by necessary implication. Adjudication of certain
      categories of proceedings are reserved by the legislature exclusively
      for public fora as a matter of public policy. Certain other categories
      of cases, though not expressly reserved for adjudication by public
      fora (courts and tribunals), may by necessary implication stand
      excluded from the purview of private fora. Consequently, where the
      cause/dispute is inarbitrable, the court where a suit is pending, will
      refuse to refer the parties to arbitration, under Section 8 of the Act,
      even if the parties might have agreed upon arbitration as the forum
      for settlement of such disputes.”
     11. Thereafter, this Court in Vidya Drolia v. Durga Trading Corpn.,
(2021) 2 SCC 1, laid down a fourfold test for determining when the
subject-matter of a dispute in an arbitration agreement is not arbitrable.
These were:
      “(1) When cause of action and subject-matter of the dispute relates to
      actions in rem, that do not pertain to subordinate rights in personam
      that arise from rights in rem.
      (2) When cause of action and subject-matter of the dispute affects
      third-party rights; have erga omnes eff ect; require centralised
      adjudication, and mutual adjudication would not be appropriate
      and enforceable.
      (3) When cause of action and subject-matter of the dispute relates to
      inalienable sovereign and public interest functions of the State and
      hence mutual adjudication would be unenforceable.
 SUSHMA SHIVKUMAR DAGA & ANR. v. MADHURKUMAR 917
 RAMKRISHNAJI BAJAJ & ORS [SUDHANSHU DHULIA, J.]

     (4) When the subject-matter of the dispute is expressly or by necessary
     implication non-arbitrable as per mandatory statute(s).”
      Nevertheless, the case before the Civil Court does not fall in any of the
categories, visualised in either Booz Allen (supra) or Vidya Drolia (supra)
referred above.
     12. In Vidya Drolia (supra), this Court has held that Court will only
decline reference under Section 8 or under Section 11 of the Act in rare
cases where the Court is certain that either the arbitration agreement is
non-existent, or the dispute is itself “manifestly non-arbitrable”. This
was reiterated by this Court in NTPC Ltd. v. SPML Infra Ltd. (2023) 9
SCC 385.
       13. In BSNL v. Nortel Networks (2021) 5 SCC 738, this court had held
that reference to the Arbitral Tribunal can be declined by the Court, only if the
dispute is non-arbitrable. For example, consumer disputes which are entirely
different nature of disputes, statutorily protected under a special legislation.
(Smt. M. Hemalatha Devi & Ors. v. B. Udayasri 2023 INSC 870).
      14. In any case, Section 16 of the Arbitration Act gives immense powers
to the Arbitral Tribunal, including power to rule on its own jurisdiction.
Section 16 of the Arbitration Act reads as under:
     “16. Competence of arbitral tribunal to rule on its jurisdiction.—(1)
     The arbitral tribunal may rule on its own jurisdiction, including
     ruling on any objections with respect to the existence or validity of
     the arbitration agreement, and for that purpose,—
     (a) an arbitration clause which forms part of a contract shall be treated
     as an agreement independent of the other terms of the contract; and
     (b) a decision by the arbitral tribunal that the contract is null and
     void shall not entail ipso jure the invalidity of the arbitration clause.
     (2) A plea that the arbitral tribunal does not have jurisdiction shall
     be raised not later than the submission of the statement of defence;
     however, a party shall not be precluded from raising such a plea merely
     because that he has appointed, or participated in the appointment of,
     an arbitrator.
918          SUPREME COURT REPORTS                        [2023] 15 S.C.R.


      (3) A plea that the arbitral tribunal is exceeding the scope of
      its authority shall be raised as soon as the matter alleged to be
      beyond the scope of its authority is raised during the arbitral
      proceedings.
      (4) The arbitral tribunal may, in either of the cases referred to in
      sub-section (2) or sub-section (3), admit a later plea if it considers
      the delay justified.
      (5) The arbitral tribunal shall decide on a plea referred to in
      sub-section (2) or sub-section (3) and, where the arbitral tribunal
      takes a decision rejecting the plea, continue with the arbitral
      proceedings and make an arbitral award.
      (6) A party aggrieved by such an arbitral award may make an
      application for setting aside such an arbitral award in accordance
      with Section 34.”
      15. All jurisdictional issues including the existence and the validity
of an arbitration clause can be gone into by the Arbitral Tribunal. In
other words, the Arbitral Tribunal is competent to decide on its own
competence. This aspect has been dealt with in a recent judgment of
this Court in Uttarakhand Purv Sainik Kalyan Nigam Ltd. v. Northern
Coal Field Ltd. (2020) 2 SCC 455. This is what has been stated:
      “7.11. The doctrine of “kompetenz-kompetenz”, also referred to
      as “compétence-compétence”, or “compétence de la recognized”,
      implies that the Arbitral Tribunal is empowered and has the
      competence to rule on its own jurisdiction, including determining
      all jurisdictional issues, and the existence or validity of the
      arbitration agreement. This doctrine is intended to minimise
      judicial intervention, so that the arbitral process is not thwarted
      at the threshold, when a preliminary objection is raised by one
      of the parties. The doctrine of kompetenz-kompetenz is, however,
      subject to the exception i.e. when the arbitration agreement itself
      is impeached as being procured by fraud or deception. This
      exception would also apply to cases where the parties in the
      process of negotiation, may have entered into a draft agreement
      as an antecedent step prior to executing the final contract. The
SUSHMA SHIVKUMAR DAGA & ANR. v. MADHURKUMAR 919
RAMKRISHNAJI BAJAJ & ORS [SUDHANSHU DHULIA, J.]

  draft agreement would be a mere proposal to arbitrate, and not an
  unequivocal acceptance of the terms of the agreement. Section 7 of
  the Contract Act, 1872 requires the acceptance of a contract to be
  absolute and unqualified [Dresser Rand S.A. v. Bindal Agro Chem
  Ltd., (2006) 1 SCC 751. See also BSNL v. Telephone Cables Ltd.,
  (2010) 5 SCC 213 : (2010) 2 SCC (Civ) 352. Refer to PSA Mumbai
  Investments Pte. Ltd. v. Jawaharlal Nehru Port Trust, (2018) 10
  SCC 525 : (2019) 1 SCC (Civ) 1] . If an arbitration agreement
  is not valid or non-existent, the Arbitral Tribunal cannot assume
  jurisdiction to adjudicate upon the disputes. Appointment of an
  arbitrator may be refused if the arbitration agreement is not in
  writing, or the disputes are beyond the scope of the arbitration
  agreement. Article V(1)(a) of the New York Convention states that
  recognition and enforcement of an award may be refused if the
  arbitration agreement “is not valid under the law to which the
  parties have subjected it or, failing any indication thereon, under
  the law of the country where the award was made”.
  7.12. The legislative intent underlying the 1996 Act is party
  autonomy and minimal judicial intervention in the arbitral
  process. Under this regime, once the arbitrator is appointed, or
  the tribunal is constituted, all issues and objections are to be
  decided by the Arbitral Tribunal.
  7.13. In view of the provisions of Section 16, and the legislative
  policy to restrict judicial intervention at the pre-reference
  stage, the issue of limitation would require to be decided by
  the arbitrator. Sub-section (1) of Section 16 provides that the
  Arbitral Tribunal may rule on its own jurisdiction, “including
  any objections” with respect to the existence or validity of the
  arbitration agreement. Section 16 is as an inclusive provision,
  which would comprehend all preliminary issues touching upon
  the jurisdiction of the Arbitral Tribunal. The issue of limitation
  is a jurisdictional issue, which would be required to be decided
  by the arbitrator under Section 16, and not the High Court at the
  pre-reference stage under Section 11 of the Act. Once the existence
  of the arbitration agreement is not disputed, all issues, including
920          SUPREME COURT REPORTS                     [2023] 15 S.C.R.


      jurisdictional objections are to be decided by the arbitrator.”
      16. The purpose behind giving these powers to the Arbitral
Tribunal is to minimise judicial interference in arbitration matters. In
Weatherford Oil Tool Middle East Ltd. v. Baker Hughes Singapore
PTE 2022 SCC OnLine SC 1464, this court had observed that a bare
perusal of Section 16 of the Arbitration Act would indicate that the
arbitration clause in a contract would be an independent agreement
in itself and the arbitrator is empowered to decide upon its existence
and validity.
      17. After the 2015 amendment, primarily the court only has to see
whether a valid arbitration agreement exists. Additionally, the clear
non-arbitrability of cases, such as where a party to the agreement is
statutorily protected, such as a consumer “has also to be seen by the
Court” (Booz Allen supra). Short of the narrow field stated above, the
scope of judicial scrutiny at the stage of Section 11 (6) or Section 8
is extremely limited.
      Objections will nevertheless be raised both on Section 8 and
Section 11 applications. These objections can be genuine, such as
where there is no arbitration clause or where the matter is itself non-
arbitrable, but often these objections could be only to wriggle out of
the statutory commitment of parties to a defined process of redressal
mechanism.
     18. In the present case there are broadly three objections of the
appellants on the Section 8 application moved by the respondents which
has already been allowed by the two courts below. The first objection
regarding the absence of an arbitration clause in the Conveyance Deed
dated 17.12.2019 and the development agreements has already been
discussed in detail in the preceding paragraphs.
      19. The second is that the suit filed by the appellants is for
cancellation of a document relating to immovable property i.e. land
and it therefore amounts to an action in rem and hence arbitration is not
the remedy. This question however, is no more res integra. Elaborate
analysis on this aspect has been done by this Court in the case of
Deccan Paper Mills v. Regency Mahavir Properties, (2021) 4 SCC
SUSHMA SHIVKUMAR DAGA & ANR. v. MADHURKUMAR 921
RAMKRISHNAJI BAJAJ & ORS [SUDHANSHU DHULIA, J.]

786, therein this court after referring to all the relevant precedents
and the case laws has held that whether it is a suit for cancellation of
a deed or a declaration of rights rising from the deed, it would only
be an action in personam and not in rem. The decision of the Division
Bench of Andhra Pradesh High Court in Aliens Developers (P) Ltd. v.
Janardhan Reddy, 2015 SCC Online Hyd 370, was held to be wrong
wherein it was held that a suit under Section 31 of Specific Relief Act
amounts to an action in rem and this adjudicatory function can only be
done by the Competent Civil Court and the powers cannot be exercised
by an Arbitrator. The basic foundation of the Court for holding that a
Section 31 suit for cancellation of a document amounts to an action in
rem was held to be wrong. The entire scope and ambit of the Specific
Relief Act, 1963 was considered and in Deccan Paper Mills (supra),
the anomalies in law for holding such to be an action in rem were
discussed and it was held that a relief sought under the Specific Relief
Act is nothing but an action in personam.
      20. The third objection is regarding fraud. The plea of fraud raised
by the appellants in their objection to the Section 8 application has
never been substantiated. Except for making a bald allegation of fraud
there is nothing else. This Court has consistently held that a plea of
fraud must be serious in nature in order to oust the jurisdiction of an
Arbitrator. In Rashid Raza v. Sadaf Akhtar, (2019) 8 SCC 710, this
Court laid down two conditions which must be satisfied before the Court
can refuse to refer the matter to the Arbitrator, a forum consciously
decided by parties in an agreement. The first is whether the plea
permeates the entire contract and above all, the arbitration agreement,
rendering it void or secondly, whether the allegation of fraud touches
upon the internal affairs of the parties inter se having no implication
in the public domain. The allegations must have some implication in
public domain to oust the jurisdiction of an Arbitrator, if an allegation
of fraud exists strictly between the parties concerned, the same will
not be termed to be as a serious nature of fraud and hence would not
be barred for arbitration.
      21. In the present case, therefore there is absolutely no ambiguity
that both the Tripartite Agreements dated 31.03.2007 and 25.07.2008
922           SUPREME COURT REPORTS                    [2023] 15 S.C.R.


contain an arbitration clause, which forms the basis of all subsequent
agreements including the agreements sought to be declared as validly
terminated by the appellants and the conveyance deed sought to be
declared as null and void. Both the trial court as well as the High Court
have given a correct finding on facts as well as on law. We find no
scope for interference in the matter. This appeal hence has no force,
and is hereby dismissed.
      No order as to costs.


Headnotes prepared by:                                    Appeal dismissed.
Ankit Gyan