Trust disputes are non-arbitrable when the Trusts Act allocates civil court remedies and bars private arbitration by implication.

Disputes arising from a private trust deed and the Indian Trusts Act were treated as non-arbitrable because the Trusts Act provides specific remedies before the civil court for matters such as administration, trustee powers and duties, and removal of trustees. The court also held that judicial intervention remains available where the existence, validity, enforceability, or subject-matter arbitrability of an arbitration agreement is in issue. A civil suit for declaration and injunction against arbitration was therefore maintainable, as arbitration was not an equally efficacious remedy for a non-arbitrable trust dispute.

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Issues: (i) Whether the disputes arising out of the trust deed and the Indian Trusts Act were arbitrable and could be referred to arbitration; (ii) Whether a civil court could refuse to entertain a suit seeking declaration and injunction against arbitration and compel the parties to pursue arbitral proceedings.

Issue (i): Whether the disputes arising out of the trust deed and the Indian Trusts Act were arbitrable and could be referred to arbitration.

Analysis: The arbitration clause had to be tested against the statutory scheme governing private trusts. The Trusts Act provides specific remedies before the principal civil court of original jurisdiction for questions concerning administration, powers, duties, removal of trustees and related matters. Such disputes, by necessary implication, fall outside private arbitration. The earlier authorities on non-arbitrability of trust disputes and the later articulation that the Trusts Act excludes arbitration by implication were treated as controlling.

Conclusion: The disputes were held to be non-arbitrable and incapable of being decided by an arbitral tribunal, in favour of the appellants.

Issue (ii): Whether a civil court could refuse to entertain a suit seeking declaration and injunction against arbitration and compel the parties to pursue arbitral proceedings.

Analysis: The power of judicial intervention under the Arbitration and Conciliation Act was held to survive where the very existence, validity, or enforceability of the arbitration agreement and the arbitrability of the subject matter are in issue. A suit seeking declaration and injunction was maintainable where the dispute was prima facie outside arbitral jurisdiction. The bar under the Specific Relief Act was inapplicable because the alternative arbitral remedy was not an equally efficacious remedy for a non-arbitrable trust dispute.

Conclusion: The civil court was held to have jurisdiction to examine arbitrability and to grant relief against continuation of arbitration, in favour of the appellants.

Final Conclusion: The impugned dismissal was set aside, and the suits were revived for further proceedings from the stage of issuance of summons because the dispute was held to be outside arbitral jurisdiction.

Ratio Decidendi: Disputes arising out of a private trust deed and the Trusts Act are excluded from arbitration by necessary implication, and a civil court may intervene to prevent reference of such non-arbitrable disputes to arbitration.

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