Return Of Title Deeds Dispute Remains Arbitrable Despite Mandatory Injunction Relief: Kerala High Court

The Kerala High Court on 14 July 2025 held that a claim for return of title deeds remains arbitrable even when framed as a suit for mandatory injunction, ruling that the nature of the relief claimed does not determine arbitrability when the dispute arises from an agreement containing a broad arbitration clause.

Justice T.R. Ravi allowed the reference of the dispute between The Indian Hotels Co. Ltd. and KTC Group entities to arbitration, holding that the expression “any matter in any way connected with or arising out of” the agreement was wide enough to cover the claim for return of title deeds despite the proposed sale not materialising. He observed:

“This Court is hence of the opinion that the return of such documents by the principal is necessarily a matter coming within the purview of Ext.B2 agreement. The words 'any matter in any way connected with or arising out of these present or the implementation thereof or the rights, duties or liabilities of either party thereof in connection with these presents' are of widest amplitude and can even take in a dispute regarding the very existence of an arbitration agreement.”

The dispute arose from a proposed sale of two adjoining properties in Kozhikode. One property, measuring 2.43 acres and having a luxury hotel, belonged to KTC Hotels Pvt. Ltd., while the adjoining 2.25 acres belonged to KTC Group entities.

By a letter dated 26 March 1990, The Indian Hotels Co. Ltd., a Tata Group company, offered Rs. 95 lakh for the hotel property and Rs. 90 lakh for the adjoining land. After paying Rs. 18.5 lakh on 28 March 1990 and a further Rs. 50 lakh in March 1991, the parties executed an agreement dated 22 March 1991 containing an arbitration clause. Clause 5 of the agreement required KTC Group entities to deposit the title deeds of the adjoining land with the company's lawyers to hold them in trust. However, the sale did not materialise.

In 2019, KTC Group entities invoked arbitration seeking return of the title deeds. They later withdrew the arbitration proceedings with liberty to initiate fresh proceedings and filed a civil suit before the Principal Munsiff Court-I, Kozhikode, seeking the same relief. The Indian Hotels Co. Ltd. filed an application under Section 8 of the Arbitration and Conciliation Act, 1996, which requires a civil court to refer parties to arbitration where the dispute is covered by a valid arbitration agreement.

The Munsiff Court dismissed the application on 16 June 2022. However, the Additional District Court-V, Kozhikode, allowed the appeal on 14 July 2025 and referred the dispute to arbitration. Aggrieved by the order, KTC Group entities approached the Kerala High Court by filing a Civil Revision Petition under Section 115 of the Code of Civil Procedure, 1908.

They contended that the arbitration agreement was invalid as the parties had signed it on different dates, that a claim for mandatory injunction seeking return of title deeds was not arbitrable, that the dispute involved a trust, and that the claim was barred by delay. The Indian Hotels Co. Ltd. argued that the arbitration clause covered the dispute.

Rejecting the objections, the High Court held that an enquiry under Section 8 of the Arbitration and Conciliation Act is limited to examining whether a prima facie valid arbitration agreement exists and whether the dispute falls within its scope.

It found no prima facie invalidity in the arbitration agreement, observing that the dates mentioned below the signatures related to company resolutions or partnership deeds and not the execution of the agreement.

Further, the Bench held that the title deeds were handed over only in connection with the proposed sale and that their delivery to the company's Vice President instead of its lawyers did not alter the obligation to return them. It noted that merely describing the relief as a mandatory injunction would not change the contractual nature of the dispute or make it non-arbitrable. It observed:

“The Court is not concerned with how the plaintiff chooses to mould his prayer. What is to be looked into is the dispute that the plaintiff has raised in the action brought before the civil court and whether such a dispute is arising from an agreement which provides arbitration as a dispute resolution mechanism. On the facts of this case, I hold that the relief of mandatory injunction claimed in the suit is arbitrable.”

Accordingly, the High Court dismissed the Civil Revision Petition, finding no illegality in the Additional District Court's order dated 14 July 2025.

Appearances for petitioner (M/s Saradhi Lines [P] Ltd & Ors.): Advocates K. Latha, Lalitha A., Gayathri Narendranath, B.G. Bhaskar.

Appearances for respondent (The Indian Hotels Co. Ltd.): Advocates Srinath Girish, P. Jeril Babu, Prasudha S.