Arbitrability of bank recovery disputes upheld where contractual money claims remain rights in personam and arbitration clause survives.

Disputes within the Debt Recovery Tribunal's jurisdiction under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 were examined in light of arbitrability under the Arbitration and Conciliation Act, 1996. The debt recovery regime was treated as a substitute forum for civil courts in bank recovery matters, but not as creating special substantive rights or excluding private adjudication by necessary implication. A contractual money claim between private parties was characterised as a right in personam, making it capable of arbitration. The exclusive jurisdiction bar under the debt recovery law was held to exclude civil courts, not arbitration, so the parties' arbitration clause remained operative.

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Issues: Whether disputes falling within the jurisdiction of the Debt Recovery Tribunal under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 are excluded from arbitration under the Arbitration and Conciliation Act, 1996.

Analysis: The scope of the two enactments was examined by reference to their object, scheme, and the nature of the dispute. The recovery jurisdiction created under the debt recovery law was treated as a substitute for the civil court for adjudication of money claims by banks and financial institutions, without creating any special substantive rights in favour of either side. By contrast, arbitration was recognised as a private forum based on party autonomy, and the decisive inquiry was whether the dispute was capable of adjudication by a private forum. The dispute here concerned a contractual money claim between private parties, which was characterised as a right in personam and not a right in rem. The exclusive jurisdiction provisions of the debt recovery law were held to bar civil courts, but not to exclude arbitration by necessary implication. The arbitration clause agreed between the parties therefore remained operative.

Conclusion: Proceedings before the Debt Recovery Tribunal were held to be arbitrable, and the Arbitration and Conciliation Act, 1996 was not excluded in respect of such claims.

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