Axis Finance Limited vs Murtuza Hussain & Ors.

$~30
* IN THE HIGH COURT OF DELHI AT NEW DELHI
th
% Date of Decision: 28 October, 2026
# CNR No. DLHC010466042026
+ O.M.P.(I) (COMM.) 449/2026
AXIS FINANCE LIMITED .....Petitioner
Through: Mr. Vivek Sinha and Mr. Vivek
Malik, Advocates.
versus
MURTUZA HUSSAIN & ORS. .....Respondents
Through: Mr. Shubhangam Thakur, Advocate.

CORAM:
HON'BLE MR. JUSTICE MANOJ JAIN
J U D G M E N T (oral)

1. The present petition has been filed under Section 9 of Arbitration and
Conciliation Act, 1996 read with Section 151 CPC and seeks , inter alia,
following relief:-
“………..
…………
d. Pass an order restraining the Respondents, their agents, assigns or any
person claiming through or under them from selling, transferring, alienating,
encumbering, or creating any third-party rights, title or interest in the
mortgaged property being” Plot No.- 287,117,312, Sheet No- 05, Star No-
5/7,6/4, Kh.no-156/39156/44 156/51156/76Mauza- Talapara, Kranti kumar
Bhartiya Nagar Ward No.- 5/7,6/4, Kh.no.- 156/39 156/44 156/51
156/76Mauta- Talapara, Kranti kumar Bhartiya Nagar Ward No.-14, Area
-7090 sqft, Old P.h.no.- 22/28, New P.h.no-00039, Old R.n.m. - Bilaspur, New
R.n.m.-Juna Bilaspur, Tah. Dist.- Bilaspur C. G. Chhattisgarh
BILASPUR(CGH) 495004.”, or otherwise dealing with the said Property in
any manner whatsoever, and to maintain status quo with respect thereto during
the pendency of the present Petition;
……….
……….”


2. Petitioner is a Non-Banking Financial Company and as per the
averments made in the petition, Loan facility was sanctioned to the
Signature Not Verified
O.M.P.(I) (COMM.) 449/2026 1

Digitally Signed
By:SONIA THAPLIYAL
Signing Date:30.10.2026
16:06:54

respondents and they were disbursed a sum of Rs. 3,50,00,000/- vide Facility
Agreement dated 29.02.2024. To avail said loan, the borrowers (respondents
herein) had mortgaged their abovesaid property of Bilaspur.
3. The loan has been recalled.
4. The outstanding amount is stated to be Rs. 3,45,40,330/- as on date of
issuance of notice i.e. as on 06.02.2026.
5. Learned counsel for the petitioner submits that the Loan Facility
Agreement contains arbitration clause. Reference is made to clause 36 of the
abovesaid Agreement which, inter alia , provides that the seat for arbitration
shall be Mumbai and/or Delhi, as may be determined by the lender.
6. The property which the borrower offered for mortgage is also the same
as mentioned in the abovesaid prayer clause, extracted above.
7. Learned counsel for the petitioner submits that they have already
invoked arbitration by sending a communication on 12.10.2026 and if the
respondents do not consent to the name of suggested Arbitrator, they would
file appropriate application seeking appointment of Arbitrator. He, however,
submits that since the outstanding is huge and the petitioner has gathered
information which indicates that the respondents are in the process of
disposing of their assets, including the abovesaid property, the interest of the
petitioner may be protected so that its legitimate claim does not get defeated
and the arbitral proceedings do not get frustrated.
8. Mr. Shubhangam Thakur, learned counsel for respondents has joined
the proceedings through video-conferencing . He, while refuting the abovesaid
contentions, submits on instruction that the respondents are in possession of
abovesaid residential property situated at Bilaspur, Chattisgarh and they have,
as on date, no intention to create any third party interest of any nature
Signature Not Verified
O.M.P.(I) (COMM.) 449/2026 2

Digitally Signed
By:SONIA THAPLIYAL
Signing Date:30.10.2026
16:06:54

whatsoever. He, however, submits that he has not received any instructions
from the respondents with respect to the receipt of any notice of invocation of
Arbitration.
9. Needless to mention, jurisdiction under Section 9 of Arbitration and
Conciliation Act, 1996 is, essentially, protective and preservative in nature
and is intended to safeguard the subject matter of Arbitration and to preserve
the efficacy of the arbitral remedy, pending constitution of Arbitral Tribunal.
Though, the claim in question is with respect to the outstanding dues of a loan
amount, fact remains that the respondent, while availing the abovesaid loan
facility had also mortgaged the abovesaid property and if the abovesaid
property is transferred or alienated before the constitution of the Arbitral
Tribunal, it may cause serious prejudice to the petitioner. Thus, on a holistic
assessment, the petitioner has established a prima facie arbitral claim
warranting interim protection. The disputes raised by the petitioner cannot be
conclusively adjudicated in proceedings under Section 9 of the Act. At the
same time, the apprehension expressed by the petitioner regarding alienation
of the subject property cannot be brushed aside.Balance of convenience also
lies in preserving the existing position, albeit , for a limited period.
10. Resultantly, the present petition is disposed of with direction to
respondents not to create any third-party interest of any nature whatsoever,
with respect to the abovesaid property as described in “prayer (d)” of the
petition till any decision of application to be filed under Section 17 of
Arbitration and Conciliation Act, 1996 by the petitioner herein. It is, however,
clarified that the petitioner would not show any laxity of any nature
whatsoever and if situation so arises, application seeking appointment of
Arbitrator be filed without any further delay. The restraint order would remain
Signature Not Verified
O.M.P.(I) (COMM.) 449/2026 3

Digitally Signed
By:SONIA THAPLIYAL
Signing Date:30.10.2026
16:06:54

in operation for a period of ninety days from today or till adjudication of
proposed application under Section 17 of said Act , whichever is earlier.
11. Petition stands disposed of in aforesaid terms.
12. Nothing contained herein shall be construed as an expression of
opinion on the merits of the disputes between the parties. The Arbitral
Tribunal shall decide all the issues independently, uninfluenced by any
observations made herein.





(MANOJ JAIN)
JUDGE
OCTOBER 28, 2026/ sw/sk

Signature Not Verified
O.M.P.(I) (COMM.) 449/2026 4

Digitally Signed
By:SONIA THAPLIYAL
Signing Date:30.10.2026
16:06:54