Delhi High Court
Gaurav Aggarwal vs Richa Gupta on 21 November, 2025
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 06.11.2025
Judgment pronounced on: 21.11.2025
+ FAO(OS) 136/2025 and CM APPL. 69067/2025
GAURAV AGGARWAL .....Appellant
Through: Mr. Avnish Pandey, Adv.
versus
RICHA GUPTA .....Respondent
Through: Mr Viraj R. Datar, Sr. Adv with
Mr. Chetan Lokur, Advs.
CORAM:
HON'BLE MR. JUSTICE ANIL KSHETARPAL
HON'BLE MR. JUSTICE HARISH VAIDYANATHAN
SHANKAR
JUDGMENT
ANIL KSHETARPAL, J.
1. The present Appeal assails the correctness of the judgment
dated 15.10.2025 passed by the learned Single Judge in O.M.P.
1/2025 [hereinafter referred to as "Impugned Judgment"], whereby the
Petition filed by the Appellant under Section 34 of the Arbitration and
Conciliation Act, 1996 [hereinafter referred to as "AC Act"] was
dismissed and the Arbitral Award dated 10.01.2025 was upheld. By
the said Award, the learned Sole Arbitrator terminated the arbitral
proceedings under Section 32(2)(c) of the AC Act, holding that the
Agreement to Sell [hereinafter referred to as „ATS‟] dated 05.01.2024,
was unstamped, unregistered, and therefore, unenforceable in law.
2. The issue which arises for consideration in the present Appeal is
whether the learned Single Judge was justified in upholding the
termination of the arbitral proceedings under Section 32(2)(c) of the
AC Act by the Arbitral Tribunal, on the ground that the ATS dated
05.01.2024, forming the basis of the arbitral claims, being
unregistered and unstamped in respect of immovable property situated
in the State of Uttar Pradesh, was unenforceable and incapable of
being acted upon.
FACTUAL MATRIX
3. The brief facts, leading to the filing of the present Appeal, are
as follows. The Respondent is the sub-lessee in possession of a Flat
bearing Unit No. KLP0152004 situated in Kalypso Court-15, Jaypee
Greens, Noida, Uttar Pradesh [hereinafter referred to as "subject
property"], under a Sub-Lease Deed dated 11.07.2021 executed by
Jaypee Infratech Limited [hereinafter referred to as "JIL"] in her
favour.
4. The Respondent approached the Appellant with an offer to
transfer her sub-leasehold interest in the subject property. Pursuant
thereto, an ATS was executed between the parties on 05.01.2024 for
the transfer of the Respondent‟s sub-leasehold rights in the subject
property for a total consideration of Rs. 5 crores, out of which the
Appellant paid a sum of Rs. 50,000/- as token money.
5. Under Clause 5.1 of the ATS, the Respondent was required to
obtain prior permission from JIL and Yamuna Expressway Industrial
Development Authority [hereinafter referred to as "YEIDA"] for
transfer of the sub-leasehold rights in the subject property and the
Appellant was required to extend his complete cooperation to the
Respondent in getting the said approval by signing, executing and
submitting all necessary documents/application required for such
approval. The Respondent, vide letter dated 15.01.2024, informed the
Appellant regarding the requirement of filing a joint application
before JIL and YEIDA for obtaining such permission.
6. Subsequently by a Notice dated 07.02.2024, the Respondent
communicated the termination of the ATS to the Appellant, alleging
breach of its terms. The Appellant disputed the allegations in his reply
dated 08.03.2024. Thereafter, by notice dated 15.04.2024, the
appellant invoked the arbitration clause contained in Clause 14 of the
ATS in terms of Section 21 of the AC Act. The Respondent, in her
reply, denied the existence of any valid or enforceable contract,
asserting that the ATS was neither registered nor duly stamped and
was, therefore, not arbitrable.
7. Notwithstanding the above objection, the arbitration
proceedings commenced before the Sole Arbitrator named in the ATS.
The Appellant filed his Statement of Claim seeking specific
performance of the ATS, while the Respondent, in her Statement of
Defence, reiterated that the ATS was unenforceable for want of
registration and stamping as required under the law applicable in the
State of Uttar Pradesh.
8. Subsequently, the Respondent moved an application under
Section 32(2)(c) of the AC Act seeking termination of the arbitral
proceedings on the ground that the ATS, not being duly stamped or
registered as required under the Registration Act, 1908, as applicable
in the State of Uttar Pradesh, was an invalid and unenforceable
document. The Appellant contested the said application, contending
that the transaction was merely for the transfer of sub-leasehold rights
and not ownership, and that such an agreement did not attract
mandatory stamping or registration under Section 17 of the
Registration Act, 1908.
9. The Sole Arbitrator, after hearing the parties, allowed the
Respondent‟s application vide Award dated 10.01.2025 holding that
the ATS constituted a "contract for sale" within the meaning of
Section 54 of the Transfer of Property Act, 1882 [hereinafter referred
to as "TPA"], and in view of the U.P. Civil Laws (Reforms and
Amendment) Act, 1976 (Act 57 of 1976), significantly amending
Section 54 of the TPA in Uttar Pradesh, all contracts for sale related to
immovable properties, irrespective of its value, required mandatory
registration and appropriate stamping. Consequently, the arbitral
proceedings were terminated under Section 32(2)(c) of the AC Act.
10. The Appellant thereafter filed a petition under Section 34 of the
AC Act before the learned Single Judge challenging the award dated
10.01.2025. The learned Single Judge, by the Impugned Judgment
dated 15.10.2025, dismissed the petition, upholding the reasoning of
the Arbitrator and concluding that the ATS, being unregistered and
unstamped, was unenforceable in law and incapable of being acted
upon in Arbitration.
SUBMISSIONS ON BEHALF OF THE APPELLANT
11. Learned counsel for the Appellant contended that the learned
Single Judge erred in affirming the Award dated 10.01.2025,
inasmuch as both the learned Arbitrator and the Court below failed to
appreciate that the ATS did not create, declare, assign, limit, or
extinguish any right, title, or interest in the immovable property. It
was merely a contractual arrangement contemplating a future transfer,
and therefore, did not require registration under Section 17 of the
Registration Act, 1908.
12. It was submitted that the learned Single Judge overlooked the
settled legal position that an unregistered ATS can, nonetheless, form
the basis of an arbitral reference for enforcing contractual obligations,
including specific performance, particularly when such an agreement
does not itself convey any proprietary rights in the property.
13. Learned counsel further argued that the finding of the learned
Arbitrator that the ATS was "unenforceable" for want of registration
and stamping is contrary to the provisions of the Indian Stamp Act,
1899 [hereinafter referred to as "IS Act"]. Even assuming that the
document was insufficiently stamped, the proper course would have
been to impound the same and refer it to the competent authority for
adjudication of stamp duty under Section 33 of the IS Act, and not to
terminate the proceedings altogether under Section 32(2)(c) of the AC
Act.
14. It was urged that Section 32(2)(c) of the AC Act empowers the
Arbitral Tribunal to terminate proceedings only when "it becomes
impossible for the tribunal to continue the proceedings for any other
reason." The inability to continue cannot arise from a curable
procedural defect such as deficient stamping. The Arbitrator,
therefore, exceeded his jurisdiction in invoking Section 32(2)(c) of the
AC Act to terminate the proceedings instead of proceeding with
adjudication after curing the defect.
15. The Appellant also submitted that the learned Single Judge
erroneously applied the provisions of the U.P. Civil Laws (Reforms
and Amendment) Act, 1976, to the present case. The said amendment
merely provides for compulsory registration of "contracts to transfer
for consideration" of immovable property, but does not declare such
unregistered agreements void or non-existent. Consequently, the
agreement remained valid and enforceable inter partes, and any defect
of registration could not render the arbitration clause inoperative.
SUBMISSIONS ON BEHALF OF THE RESPONDENT
16. Per contra, learned counsel for the Respondent submitted that
the ATS, being unregistered and unstamped, was void and
unenforceable in law, and consequently, no arbitral proceedings could
validly be founded upon it. It was argued that under the U.P. Civil
Laws (Reforms and Amendment) Act, 1976 (Act 57 of 1976), the
provisions of Sections 17(1A) and 49 of the Registration Act, 1908
stand amended in their application to the State of Uttar Pradesh,
making registration compulsory for all contracts for sale of
immovable property. An unregistered contract for sale cannot be
received in evidence, even for collateral purposes, nor can it be
specifically enforced. Thus, the ATS, not having been registered, was
inadmissible in evidence and incapable of being acted upon even to
maintain arbitral proceedings.
17. Learned counsel submitted that the Appellant‟s plea of
impounding under the IS Act, was misconceived, as the defect in the
present case went beyond mere deficiency of stamp duty. The
requirement of registration was a substantive condition precedent
under the amended Uttar Pradesh law, non-compliance with which
rendered the document itself void and non-existent for legal purposes.
The Arbitrator, therefore, rightly held that continuation of arbitral
proceedings would be an exercise in futility.
18. It was further contended that Section 32(2)(c) of the AC Act,
squarely empowered the Arbitrator to terminate the proceedings when
it became impossible to continue them, and that impossibility arose
once the foundational document was held to be inadmissible in
evidence.
19. It was submitted that the learned Single Judge correctly applied
binding precedents and found no jurisdictional error in the award
warranting interference under Section 34 of the AC Act. The scope of
judicial review under Section 34 of the AC Act being narrow and
confined to patent illegality or contravention of public policy, the
Impugned Judgment, upholding the Arbitrator‟s view, calls for no
interference in appellate jurisdiction.
ANALYSIS & FINDINGS
20. This Court has carefully considered the submissions advanced
by learned counsels for the parties and examined the record of the
Arbitral proceedings, the Award dated 10.01.2025, and the Impugned
Judgment dated 15.10.2025 passed by the learned Single Judge.
21. The core question that arises for consideration is whether an
unstamped and unregistered Agreement to Sell, executed in the State
of Uttar Pradesh with respect to immovable properties, is enforceable
and admissible in evidence, such as to sustain continuation of arbitral
proceedings and consequent grant of relief.
22. It is not in dispute that the subject property is situated in the
State of Uttar Pradesh, where the Transfer of Property Act, 1882, and
the Registration Act, 1908, as applicable in that State, stand materially
amended by the U.P. Civil Laws (Reforms and Amendment) Act,
1976 (Act 57 of 1976). By virtue of this amendment, Section 54 was
amended to mandate that every Contract for sale of immovable
property, irrespective of its value, can be made only by a registered
instrument.
By the same Amendment Act of 1976, clause (f) was inserted in
Section 17(1) of the Registration Act, thereby bringing within the fold
of compulsory registration "any other instrument required by any law
for the time being in force to be registered", which has the effect of
making contracts for sale in Uttar Pradesh compulsorily registrable.
By the same amendment Act, Section 49 of the Registration Act was
also substantially modified, reinforcing that an instrument required to
be registered but not duly registered shall not be received as evidence
of any transaction affecting such property or conferring such power,
creating such right or relationship, unless it has been registered, and
the proviso was omitted.
It is necessary to set out a comparative overview of the Central
enactment and the amendments introduced in the State of UP. The
position may be tabulated as under:
Statute / Central Law Law as applicable to Uttar
Provision Pradesh after the UP Civil
Laws (Reforms and
Amendment) Act, 1976
Section 54, "Sale" defined.--"Sale" is a "Sale" defined.--"Sale" is a
Transfer of transfer of ownership in transfer of ownership in
Property exchange for a price paid or exchange for a price paid or
Act, 1882 promised or part-paid and part- promised or part-paid and part-
promised. promised.
Sale how made.--Such Sale how made.--Such transfer,
transfer, in the case of tangible in the case of tangible
immoveable property of the immoveable property, or in the
value of one hundred rupees case of a reversion or other
and upwards, or in the case of a intangible thing, can be made
reversion or other intangible only by a registered instrument. .
thing, can be made only by a
registered instrument. Contract for sale.--A contract
for the sale of immoveable
In the case of tangible property is a contract that a sale
immoveable property of a value of such property shall take place
less than one hundred rupees, on terms settled between the
such transfer may be made parties.
either by a registered
instrument or by delivery of the It does not, of itself, create any
property. interest in or charge on such
property
Delivery of tangible
immoveable property takes Such contract can be made only
place when the seller places the by a registered instrument.
buyer, or such person as he [inserted vide UP Act No. 57 of
directs, in possession of the 1976]
property.
Contract for sale.--A
contract for the sale of
immoveable property is a
contract that a sale of such
property shall take place on
terms settled between the
parties.
It does not, of itself, create any
interest in or charge on such
property
Section No equivalent clause in the Clause (f) inserted: "any other
17(1) (f) Central Act. instrument required by any law
Registration for the time being in force, to be
Act, 1908 registered."
[This brings contracts for sale
within compulsory registration in
UP]
Section These documents need not be UP inserts the words "other than
17(2)(v) registered unless the interest is contract for sale", and omits the
(documents ₹100 or more. value threshold
creating
right to [Contracts for sale are carved
obtain out and treated separately; they
another become compulsorily registrable
document) irrespective of value in UP]
Explanation Explanation.--A document Explanation omitted by the UP
to Section purporting or operating to Amendment Act
17(2) effect a contract for the sale of
Registration immovable property shall not
Act, 1908 be deemed to require or ever to
have required registration by [removes the statutory exception
reason only of the fact that such that protected such documents
document contains a recital of from compulsory registration
the payment of any earnest even when they recited payment
money or of the whole or any of any earnest money]
part of the purchase money.
Section 49 Bars effect of unregistered Inserts: "or of any other law for
(main documents required to be the time being in force."
paragraph) registered u/s 17 or by any [Strengthens the bar: if any law
Registration provision of the Transfer of as applicable in UP requires
registration and it is not
Act, 1908 Property Act, 1882 registered]
Section Non-registration of documents clause (b) substituted to: "confer
49(b) required to be registered cannot any power or create any right or
Registration "confer, any power to adopt" relationship."
Act, 1908
[The restriction becomes broader
even powers or relationships
cannot arise from an
unregistered document.]
Section "be received as evidence of any Amendment adds: "or creating
49(c) transaction affecting such such right or relationship."
Registration property or conferring such
Act, 1908 power, unless it has been "be received as evidence of any
registered" transaction affecting such
property or conferring such
[Bars admission of unregistered power, or creating such right or
document affecting immovable relationship, unless it has been
property in evidence.] registered"
[Makes the evidentiary bar more
comprehensive.]
Proviso to Unregistered document may be omits the words "as evidence of
Section 49 admitted as evidence of a a contract in a suit for specific
Registration contract in a suit for specific performance"
Act, 1908 performance or collateral
transaction not required to be [an unregistered instrument
effected by registered cannot be used in evidence even
instrument. . for specific performance.]
23. In view of the aforesaid comprehensive statutory framework,
the contention of the Appellant that the ATS dated 05.01.2024 merely
contemplated transfer of sub-leasehold rights and, therefore, did not
require registration, cannot be accepted. The amendment introduced
by the U.P. Civil Laws (Reforms and Amendment) Act, 1976 makes
no distinction between agreements to sell relating to freehold,
leasehold, or sub-leasehold interests. Any instrument that has the
effect of creating, declaring, assigning, limiting, or extinguishing
rights in immovable property, whether ownership or leasehold, falls
within the expression "contract for sale" under Section 54 of the
Transfer of Property Act, 1882. Consequently, every such agreement
concerning immovable property situated in Uttar Pradesh must be
duly stamped and registered under the Registration Act, 1908, as
amended in its application to that State.
24. It is thus evident that unless the Agreement to Sell is duly
registered, no valid or legally enforceable contract comes into
existence in the eyes of the law in respect of immovable property
situated in Uttar Pradesh. Registration, in such context, is not a mere
procedural formality but a statutory condition precedent to the
formation of a legally enforceable contract for sale. While the doctrine
of separability preserves the arbitration agreement at the referral stage,
it does not enable the Arbitral Tribunal to proceed where the
underlying contract can be made only by a registered instrument and
is rendered inadmissible for want of compulsory registration. In such
circumstances, the continuation of the Arbitral proceedings becomes
legally untenable.
Deficiency in payment of stamp duty under the Stamp Act, although a
curable defect, does not dilute the consequences of non-registration of
an instrument required to be compulsorily registrable by the amended
Registration Act and the Transfer of Property Act, as applicable in
Uttar Pradesh, where the law mandates that contracts for sale of
immovable property can be made only by a registered instrument.
25. Once the Agreement to Sell is found to be unregistered and
unstamped, the necessary consequence under the amended Section 49
of the Registration Act is that such a document cannot be received in
evidence or acted upon for any purpose, including the enforcement of
any contractual or Arbitral rights purportedly arising therefrom. The
Arbitral Tribunal, therefore, rightly concluded that there was no valid
and enforceable agreement capable of any relief in Arbitration. The
learned Single Judge, in affirming this view, committed no error.
26. The Allahabad High Court in Irfan Qureshi v. Up State
Industrial Development Authority and Another1 has interpreted that
amendment to mean that an agreement to sell immovable property in
U.P. must be registered to create any right, title or interest and that a
non-registered agreement is inadmissible for the purpose of seeking
specific performance or other relief. Accordingly, in the present case,
since the ATS is unregistered and concerns immovable property
situated in U.P., the Arbitral tribunal correctly treated the document as
legally incapable of supporting the claimed relief and terminated the
proceedings; the learned Single Judge rightly upheld that conclusion.
27. For the aforegoing reasons, this Court finds no infirmity in the
view taken by the learned Sole Arbitrator or by the learned Single
Judge. The ATS dated 05.01.2024, being neither registered nor
properly stamped as required under the amended law applicable in the
State of Uttar Pradesh, where a contract for sale can be made only by
a registered instrument, was rendered inadmissible for the purpose of
seeking any relief affecting immovable property, including specific
performance. Without a legally admissible foundational document, the
2024:AHC:132540
Arbitral proceedings lacked the essential substratum for adjudication
and could not continue. The termination of the Arbitral proceedings
under Section 32(2)(c) of the AC Act, therefore, cannot be faulted.
28. Consequently, the Appeal, along with the pending application,
stands dismissed.
ANIL KSHETARPAL, J.
HARISH VAIDYANATHAN SHANKAR, J.
NOVEMBER 21, 2025
jai/pal
