By the Development Agreement, the appellant was granted permissive possession for the purposes of carrying out development work on the property subject matter of the Development Agreement. The application was filed on the ground that in view of the arbitration clause in the Development Agreement, the dispute ought to be referred to arbitration. The learned counsel appearing for the appellant pointed out that the High Court relied upon a decision of the Division Bench of the same Court, which holds that the adjudication on the issue whether there is a cancellation of the Development Agreement will operate in rem and therefore, the arbitration clause cannot be invoked. The learned counsel appearing for the respondent submitted that the arbitration clause will not apply as the prayer in the suit is for cancellation of the agreement in accordance with Section 31 of the Specific Relief Act. However, in the case of Deccan Paper Mills Company Limited, this Court has categorically held that it is impossible to hold that an action instituted under Section 31 of the Specific Relief for cancellation of an instrument is an action in rem. Parties shall act in accordance with the mandate of Section 8 of the Arbitration Act.
Case Title: M/S ASIAN AVENUES PVT LTD Vs. SRI SYED SHOUKAT HUSSAIN (2023 INSC 454)
Case Number: C.A. No.-002927-002927 / 2023
