Dispute About Mutation of Land is Not a Matter in Rem But in Personam – Arbitrator Has Full Jurisdiction: Punjab & Haryana High Court

"The filing of a civil suit is impermissible when arbitration proceedings already stand initiated and the dispute arises out of the settlement agreement between the parties" - In a significant judgment Punjab and Haryana High Court upheld the referability of a civil suit concerning land mutation to arbitration. The Court dismissed the revision petition under Article 227 of the Constitution, asserting that when parties have mutually agreed to resolve disputes through arbitration, and arbitration proceedings have already commenced, invoking the jurisdiction of civil courts amounts to "abuse of process."

Justice Vikram Aggarwal emphatically observed, “the present case does not clear the fourfold test laid by the Supreme Court in Vidya Drolia’s case and by no stretch of imagination can it be said that the issue raised in the civil suit is manifestly non-arbitrable.”

The litigation arose out of a long-standing dispute between the petitioners Dalbir Singh and Charanjit Singh, and the respondent company M/s Krisam Properties Pvt. Ltd., concerning ownership and possession of ancestral land in Village Chakarpur, Gurugram.

The dispute had roots in land acquisition proceedings dating back to 1997 and 2003, where the Haryana Shehri Vikas Pradhikaran (HSVP) acquired parcels of land, some of which were subsequently exchanged with the respondent company. The petitioners claimed continuous possession and alleged that a mutation entry dated 08.08.2008, in favour of HSVP, was made behind their back and without notice.

Significantly, during the pendency of litigation, the parties had entered into a Memorandum of Settlement dated 07.02.2011, which included an arbitration clause and settled their respective rights—granting petitioners a 27.5% share in the licensed land or sale proceeds.
Yet, in 2018, the petitioners filed Civil Suit No. 4930 of 2018, challenging the mutation and seeking declaratory relief with injunctions, despite the fact that arbitration proceedings had already commenced under the very settlement agreement.

The central issue before the Court was whether a suit challenging mutation in revenue records—a purported declaratory suit—was non-arbitrable, and thus, whether the trial court erred in allowing the application under Section 8 of the Arbitration and Conciliation Act, 1996, referring the dispute to arbitration.

Rejecting the petitioner’s claim that the mutation challenge involved rights in rem, the Court clarified: “It is essentially a dispute as regards a mutation of a parcel of land in which other parties are not concerned nor would it have any effect on the rights of other parties.”

Justice Aggarwal meticulously relied upon the Supreme Court rulings in Booz Allen & Hamilton v. SBI Home Finance and Vidya Drolia v. Durga Trading Corporation, reaffirming that disputes in personam are arbitrable, even if they incidentally touch public records.
He underlined: “The challenge to the mutation can very well be laid in the arbitration proceedings which have already commenced and there would be no necessity of filing a civil suit.”

The Court noted that the petitioners themselves had invoked the arbitration process by filing petitions under Sections 9 and 11 of the Arbitration Act and had raised the same issues—including the mutation—in their claim statements before the Arbitrator. The petitioners could not now attempt a parallel civil proceeding to relitigate the matter.

On the question of whether the mutation entry impacted public rights, the Court firmly held: “The dispute is a private dispute inter se the parties and not one that affects third-party rights or involves erga omnes effect.”

The High Court further addressed the argument under Section 45 of the Haryana Land Revenue Act, 1887, which allows civil suits to challenge revenue entries. Justice Aggarwal noted that while the statute allows such suits, the existence of a valid arbitration agreement and ongoing arbitral proceedings override that recourse, especially when the mutation is only a consequence of the land exchange under dispute in arbitration.
“When the exchange of land itself is in question and the matter is pending before the Arbitrator, the consequential mutation would also be decided in terms of the findings recorded as regards the exchange of the land.”

He further remarked: “It is incomprehensible as to why the learned Arbitrator would not be in a position to decide the issue… especially when even Section 127 of the 1887 Act provides for arbitration.”

Summing up, the Court dismissed the revision petition, affirming the trial court's order referring the dispute to arbitration, and highlighted that post the 2015 and 2019 amendments to the Arbitration Act, courts are to minimise interference at the Section 8 and Section 11 stages.
“Parties should not be permitted to abuse the process of law by instituting multiple litigations with a view to frustrate the settlement arrived at between them.”

This judgment adds to the growing jurisprudence reinforcing arbitration as the preferred dispute resolution mechanism in India and limits judicial intervention where parties have consciously opted for arbitration, even in matters where public records are incidentally involved.

Date of Decision: 22nd April 2025