INDIABULLS HOUSING FINANCE LTD vs FULLERTON INDIA CREDIT COMPANY LTD AND ORS on 23 October 2026

l)EI]'l'S RIICOVI,lllY Al'}PEl,l,n 'l-E 'l'ltI IltJNAl,, I)ELI II Appcal No.22120211 Arising out ol'SA viclc NI)N No.2057/2019 (l)l{'l'-1, l)clhi) Item No.27 Indiabulls IIousing I,'inancc l,imitctl V. lr'ullcrton India Credit Company l,imitcd and others 23.1(1.2026 Ilon'ble l)r. .lusticc Sudhir Kumar.lain I)r'cscnt: Ms. 'l'anvccr l(aurr, Aclvocatc f or appcllant tl-rnrr-rgh VC Sh. Aan.iancy Raghurvitnshi, Aclvocatc Ior thc rcsponclcnt rro.l throurgl-r VC 'l'his rnattcr is tal<cr-r r-rp tlrxrr-rgh Ilybrid hcaring. ot{t)Ett (ot{At,)

l. 'l'hc appcllant/lndiabr-rlls Ikrusing liinancc l.irnitccl fllccl S.n. bcaring NI)N No.20-57/2019 titlccl as lncliabulls Ilousing I,'inancc l,irnited V I,'ullcrton lndia (lrcdit (lompany l,irnitcrl which was stertccl to bc pcncling bclorc I)lt'l'-1, [)olhi. I)lt'l'-1, I)clhi vic{c impr-rgnccl orclcr clatccl I0.01 .2020l-ras clisnrisscd thc S.A. as thc pt'cscnt S.A. wzrs Iilcd by onc llnancial institr,rtion/banl< against anothcr llnancial inslitr-rtionibanl<. 'l'hc appcllant bcing aggricvccl lllcci thc prcscnt appcal bcarirrg no.2212020.

2. Ms.'l'anvccr l(autr, Aclvocittc firr thc appcllarnt ancl Sh. Aaniancy I{aghuvanshi, Aclvocato filr thc rcsponclcnt no.l statcd that in vicw o1' Scction I I o1' thc Sn Itlrn llSI Act, 2002 as prcscnt clispr-rtc involvccl in thc zrppcal is bctwccn thc two finar-rcial institr,rtions ancl tl-rc saicl clispurtc oan only bc rcsolvccl ciLhcr by conciliati<lrr or arrbitration ancl praycd that appropriatc ordcr rray bc passcd accorclir-rgly.

3. Scction 11 of tho SAITFAITSI Act, 2002 dcals with rcsolution of disputcs and providcs that whcrc any disputc is bctwccn thc bank/financial institution thcn thc clisputc shall bc settlcd by conciliation or arbitration. ,1. In vicw ol'Scction I I zrr-rcl thc Surprcnrc (burt juclgrncnt dclivcr"ccl in casc llank ol'lndia v Sri Nangli llicc Mills l)rivatc Limitcd and othcrs, Civil Appcal No.711012025 dccidcd on 23.05.2025, thc prcsent'disputc subjcct mattcr of thc prcscnt appcal can only bc docidcd cithcr by conciliation or arbitration in tcrms of Scction l1 of thc SAI{FAIiSI Act. 'I'hc rolcvant paragraph of thc judgmcnt is rcproduccd as undcr: l24.We summarizc our final conclusion as undcr: - (I) Scction 11 of thc SAIIF'AE,SI Act dcals with rcsolution of disputcs rclating to sccuritisation, rcconstruction or non-payment of any amount duc bctwcen thc bank or financial institution or assct reconstruction company or qualified huycr. (II) In order to attract thc provision of Scction 11 of thc SAIIFAESI Act, twin conditions havc to be fulfillcd bcing; first, thc disputc must bc bctwcen any bank or financial institution or assct reconstruction company or qualified buyer and sccondly, the disputc must relatc to securitisation or reconstruction or non-paymcnt of any amount due including intcrest. Whcrc the aforcsaid two conditions are found to be prima-facic satisficd, thcrc thc DltT will havi no jurisdiction and thc propcrrccourse would only be through Section 11 of the SAITFAESI Act read with the Act, 1996. (I[) fhe exprcssion "non-paymcnt of any amount duc, including intercst[ used in Section 11 of the SAITFAESI Act is of wide import and would include a various range of scenarios of tdisputest connectcd to unpaid amounts including thosc arising due to third-party dcfaults, such as indircct dcfaults of thc borrowcrs. (lV) Any dispute bctwecn two banks, financial institutions, assct reconstruction compahics or qualified buycrs etc., whcrc thc jural rclation betwecn the two is of a lender and borrowcr, thcn Section 11 of the SAIIFAESI Act will havc no application whatsoever. '['hc use of the phrase "any person" in the dcfinition of 'borrowcr'in Section 2(I) of the SAR.FAESI Act, makcs it abundantly clear that cvcn a bank, financial institution or asset reconstruction company or qualified buyer can bc considered a borrowcr, if they receivc financial assistance from a bank or financial institution etc by providing or crcating a security interest. 'fhus, a lcnder-turned-borrowcr would also fall within the scopc of a "borrowcr" undcr the SAIIFAE,SI Act and shall be governed by the same statutory framework as any ordinary borrowcr. (V) Section 11 of thc SAI{I.AIISI Act, providcs for a statutory arbitration for any dispute mentioncd thcrcin betwecn any of the partics enumerated thercundcr. '['hcrc is no nccd for an explicit written agreement to arbitratc bctwcen such partics in order to attract Section 11 of the SAltf'AESI Act. Thc said provision creates a lcgal fiction as rcgards the existcncc of an arhitration agrocmcnt notwithstanding whether such agrcemcnt cxists or not in actuality.

(VI) Scction 11 of thc SAllI,'AIlSl Act is mandatory in naturc.'fhc usc of thc word "shall" thcrcin, thc mandatc of thc said provision cannot bc bypasscd or subvcrted by thc partics by sceking recourse elsewhere.

5. Ms. 'l'anvccr Kaur, Advocatc ftlr thc appcllant statcd that as thc S.A. was filcd by lndiabulls Ilousing liinancc Limitcd and appcal is also filcd by Indiabulls Ilousing liinancc Limitcd, acoordingly thc Indiabulls Ilousing liinancc Limitcd is dircotcd to takc lcgal prococdings for ar:bitratior-r for rcsolution of disputc bctwccn thc appollant and thc rcspondont no.I whiol"r arc thc primc contcsting partios. 'I'hc prcscnt appcal is accordingly disposcd of along with pcnding applications, if any. (Dr. Justicc Sudhir Kumar Jain) Chairpcrson v$