The Punjab and Haryana High Court, under Justice Vikram Aggarwal, ruled that disputes concerning land mutation arising from a settlement agreement containing an arbitration clause must be referred to arbitration. The Court emphasized that such disputes are personal (in personam) and do not affect third-party rights, making them fit for arbitration under Section 8 of the Arbitration and Conciliation Act, 1996.
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Brief Background:
Dalbir Singh and Charanjit Singh, the petitioners, owned 3 Bigha 13 Biswa of ancestral land in Chakarpur village, Gurugram. Over the years, part of this land was acquired for public projects, leaving them with 1 Bigha. Despite acquisitions, they claimed possession of the entire land, supported by photographs.
In 2003, the Haryana Shehri Vikas Pradhikaran (HSVP) exchanged the acquired land with M/s Krisam Properties Pvt. Ltd., who later received a license to develop a commercial colony. However, the petitioners contended that possession was never legally transferred.
A Memorandum of Settlement was signed on 7 February 2011, during pending litigation before the Supreme Court. The agreement recognised the petitioners' 27.5% share and included an arbitration clause. Disputes continued when, in 2018, the petitioners discovered a mutation in favour of HSVP, allegedly without their knowledge or consent.
The petitioners filed Civil Suit No. 4930 of 2018, challenging the mutation entry. Meanwhile, the respondent filed an application under Section 8 of the Arbitration Act, seeking reference to arbitration, which was allowed by the trial court on 13 November 2022. This led to the petitioners filing a revision petition before the High Court.
The petitioners argued that a mutation dispute could not be resolved through arbitration and must be decided by a civil court under the Haryana Land Revenue Act, 1887. They also stated that an application to add HSVP as a party was still pending when the arbitration referral was allowed.
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Conversely, the respondent argued that disputes concerning entries in revenue records are personal rights and can be arbitrated. They pointed out that the petitioners had already invoked arbitration themselves by filing petitions under Sections 9 and 11 of the Arbitration Act.
The High Court stated:
"Section 8 of the Arbitration Act mandates that when a valid arbitration agreement exists, disputes must be referred to arbitration unless it is clear that no valid agreement exists."
The Court referred to key judgments like Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd. and Vidya Drolia v. Durga Trading Corporation. It reaffirmed that disputes about rights in personam, not affecting the public at large, are arbitrable.
Justice Aggarwal noted that the Memorandum of Settlement clearly defined rights among the parties and included an arbitration clause. Since the mutation dispute relates to the land governed by the settlement, it falls within the arbitration scope.
The Court observed:
"When parties agree on arbitration, they cannot later evade it by filing civil suits on the same matter."
The Court also highlighted that the petitioners had earlier filed applications under Section 9 and Section 11 of the Arbitration Act, acknowledging the arbitration agreement’s validity.
Importantly, it was clarified that:
"The mutation issue does not affect third-party rights and is confined to the parties involved."
Thus, the Court ruled that the matter must proceed through arbitration, and dismissed the revision petition.
Accordingly, the present petition was dismissed.
Case Title: Dalbir Singh and Another Dalbir Singh and Another Versus M/s Krisam Properties Private Limited
Case Number: CR-5999-2022(O&M)
Judgment Date: 22/04/2025
Mr. Aashish Chopra, Senior Advocate with Mr. Kartik Gupta, Advocate, Ms. Nitika Sharma, Advocate, Mr. Sumit Ms. Ananya Sharma, Advocate for the petitioners.
Mr. Amit Jhanji, Senior Advocate with Mr. Amit Jhanji, Senior Advocate with Mr. Animesh Sharma, Advocate, Ms. Elisa Gupta, Advocate, Mr. Shradha Deshmukh, Advocate (on Video Conferencing), Mr. Akshdeep Singh Sidhu, Advocate and Ms. Shuchi Sodhi, Advocate for the respondent.
