In Brief
A civil suit was filed by Satish Jain claiming ownership of disputed land through adverse possession and seeking declarations and injunctions. An ex-parte decree was granted in his favour, but later set aside on appeal, with the case remanded for trial. Meanwhile, the Bhopal Municipal Corporation (which had been allotted the land by the State) entered into an agreement with the plaintiff and sought mediation/arbitration. The Supreme Court held that since the ex-parte decree—the sole basis of the agreement—had been set aside and the suit was still pending on merits, the agreement lost all legal credibility and could not support arbitration proceedings. The BMC, as a State allottee, had no authority to treat the land as if the plaintiff owned it. The Court allowed the appeal, set aside the High Court's order directing implementation of the arbitrator's award, and remanded for trial on merits.
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