Section 9 interim protection survives mortgage-related objections when the court is not asked to enforce the mortgage itself.

A Section 9 petition for interim protection was held maintainable even where the underlying transaction involved mortgage-related issues, because the court was not asked to adjudicate an in-arbitrable mortgage enforcement claim. The court held that objections based on non-arbitrability could not defeat interim relief where arbitrable monetary or protective claims were pursued, leaving jurisdictional objections on any later impermissible claim to the arbitral forum. Territorial jurisdiction was upheld because the transaction and execution of documents were linked to Mumbai and part of the cause of action arose there. Applying interlocutory principles akin to Order 38 Rule 5 CPC, the court granted protective reliefs including receiver, injunction and attachment to secure the claim pending arbitration.

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Issues: (i) Whether a petition under Section 9 of the Arbitration and Conciliation Act, 1996 could be rejected on the ground that the dispute might include mortgage-related reliefs said to be non-arbitrable; (ii) whether the Bombay High Court had territorial jurisdiction to entertain the petitions; (iii) whether the petitioners had made out a case for interim measures securing the claim, including appointment of a receiver, injunction and attachment of bank accounts.

Issue (i): Whether a petition under Section 9 of the Arbitration and Conciliation Act, 1996 could be rejected on the ground that the dispute might include mortgage-related reliefs said to be non-arbitrable.

Analysis: The distinction drawn in Booz Allen between rights in rem and rights in personam was held to control a request to refer a mortgage suit under Section 8, but not to defeat a stand-alone request for interim protection under Section 9. The petitions were not founded on a statement of claim before the arbitral tribunal seeking enforcement of the mortgage, and the Court held that it could not refuse interim relief on the assumption that the petitioners would later press an in-arbitrable mortgage enforcement claim. The petitioners could pursue a money claim or other arbitrable reliefs, and if they later raised an impermissible mortgage enforcement claim, the respondent could raise jurisdictional objections before the arbitral tribunal.

Conclusion: The objection based on non-arbitrability of mortgage enforcement failed; Section 9 relief was maintainable.

Issue (ii): Whether the Bombay High Court had territorial jurisdiction to entertain the petitions.

Analysis: The loan transaction was advanced from Mumbai, the agreements and promissory note were executed at Mumbai, and part of the cause of action arose within the jurisdiction of the Court. The mere fact that the mortgaged properties were situated outside Mumbai did not deprive the Court of jurisdiction for the Section 9 petitions, especially when the petitions were not confined to enforcement of mortgage alone.

Conclusion: Territorial jurisdiction was upheld in favour of the petitioners.

Issue (iii): Whether the petitioners had made out a case for interim measures securing the claim, including appointment of a receiver, injunction and attachment of bank accounts.

Analysis: The Court held that the principles underlying Order 38 Rule 5 of the Code of Civil Procedure, 1908 guide the exercise of power under Section 9, though they do not apply mechanically. On the materials placed, the respondents' financial condition, defaults, multiple creditor liabilities, evasive replies, and the likelihood of dissipation of assets justified protective orders to secure the amount in dispute. The Court therefore found that the petitioners had established a sufficient basis for interim protection and that the reliefs could be granted to preserve the efficacy of the arbitral proceedings.

Conclusion: The petitioners were entitled to interim protection, including security, receiver, injunction and attachment as ordered.

Final Conclusion: The petitions were allowed in terms of protective interim reliefs, and the claims were secured pending arbitration.

Ratio Decidendi: A Section 9 petition for interim protection cannot be defeated merely because the underlying commercial relationship involves a mortgage, so long as the petition does not seek adjudication of an in-arbitrable mortgage enforcement claim before the court and the applicant otherwise establishes a need for protective interim relief on ordinary interlocutory principles.

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