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A Lesson in Due Diligence : Delhi HC on Unregistered Agreement and Arbitration

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Judgment dated 15.10.2025 of the High Court of Delhi in OMP 1/2025 of Gaurav Aggarwal  Vs. Richa Gupta with connected matter.

On 11.7.2021, Jaypee Infratech executed sub-lease of the flat  in favour of the respondent with one car parking.

On 5.1.2024, the petitioner had executed agreement to sell with the respondent for transfer of the respondent’s sub-lease hold interest in the flat for Rs.5 crores.

On 15.1.2024, the respondent informed the petitioner for filing joint application to JIL and the Authority for transfer of subleasehold rights.

However, on 7.2.2024, the respondent had terminated the agreement.

On 15.4.2024, the petitioner disputed the termination and invoked the arbitration.

After completion of arbitration pleadings before the Arbitrator, the respondent filed section 32[2][c] application for termination of proceedings on the ground that the agreement, being unregistered and unstamped, cannot be performed.

HELD that section 32(2)(c) is a tool for terminating proceedings before conclusion when continuation serves no legal purpose. Arbitrability is contingent on the enforceability of the underlying contract.

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