Section 9 custody of title deeds confined to arbitration parties; non-party claims must be pursued separately.

In Section 9 proceedings under the Arbitration and Conciliation Act, 1996, the court treated custody of project land title deeds as a preservation measure pending arbitration and directed their release into the joint custody of the petitioner and the respondents, as both sought that arrangement. It declined to extend that custody to MGF Developments Limited, holding that a non-party to the arbitration agreement could not use the same proceedings to seek enlargement of custody rights or modification of the earlier directions. Any demerger-based or collateral contractual claims by MGF were left to be pursued in independent proceedings.

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Issues: (i) whether the title deeds of the project land should remain in the joint custody of the petitioner and the respondents; (ii) whether MGF Developments Limited was entitled to joint custody of the title deeds or to modification of the earlier directions.

Issue (i): Whether the title deeds of the project land should remain in the joint custody of the petitioner and the respondents.

Analysis: The proceedings arose under Section 9 of the Arbitration and Conciliation Act, 1996 and the custody of the title deeds had earlier been arranged for preservation of the documents during the pending arbitration. The title deeds were already lying with the Registrar General pursuant to the court's earlier directions. Since the dispute before the Court concerned preservation and custody of the documents in aid of the arbitration between the petitioner and the respondents, and the petitioner and the respondents jointly sought release of the documents to their custody, there was no reason to disturb that arrangement.

Conclusion: The title deeds were directed to be released to the petitioner and the respondents in joint custody.

Issue (ii): Whether MGF Developments Limited was entitled to joint custody of the title deeds or to modification of the earlier directions.

Analysis: The request by MGF Developments Limited was found to lie outside the scope of the present Section 9 proceedings, as MGF Developments Limited was not a party to the arbitration agreement and had not impleaded itself in the arbitration. The Court treated the demerger-related assertions and the alleged collateral agreements as matters that could be pursued, if so advised, in independent proceedings. The earlier NCLT material was read as supporting the petitioner's retention of the land in question, not as enlarging the present proceeding to adjudicate MGF's independent claims.

Conclusion: The request for joint custody in favour of MGF Developments Limited was rejected and the application seeking modification was dismissed.

Final Conclusion: The Court maintained joint custody of the title deeds between the petitioner and the respondents, while declining to expand the custody arrangement to include MGF Developments Limited. The separate claims of MGF and Rakshit Jain, if any, were left to be pursued independently in appropriate proceedings.

Ratio Decidendi: In Section 9 proceedings, the court may preserve custody of title deeds for the parties to the arbitration, but it will not adjudicate or enlarge custody rights in favour of a non-party to the arbitration agreement; such independent claims must be pursued separately.

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